Elecon Engineering Company Limited vs Enviiro Bulkk Handling Systems

Per: Ms. Lakshmi Gurung, Member (Judicial)

This I.A. is filed by Mr. Rajat Mukherjee, the Liquidator of Envirro Bulkk Handling Systems Pvt. Ltd. (Corporate Debtor) under Regulation 45(3)(a) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (IBBI Liquidation Regulations) seeking following reliefs:

This Tribunal vide order dated 04.12.2017 in CP(IB)/1319/2017 initiated Corporate Insolvency Resolution Process (CIRP) of Envirro Bulkk Handling Systems Pvt. Ltd. (Corporate Debtor) and Mr. Rajmal Labhchand Mogra was appointed as the Interim Resolution Professional (IRP). The 1^st Committee of Creditors (CoC) Meeting was held on 16.07.2018 wherein the CoC unanimously resolved to appoint Mr. Vipul Kantilal Choksi as the Resolution Professional (RP).

Upon failure of the Resolution Process, the CoC, in its 10^th meeting dated 08.03.2019, resolved to liquidate the Corporate Debtor. Accordingly, application no. 1096/2019 was filed seeking liquidation of the Corporate Debtor. The Tribunal vide order dated 27.03.2019 initiated liquidation process of the Corporate Debtor and Mr. Rajat Mukherjee (Applicant) was appointed as the Liquidator.

Pursuant to the Liquidation order, the Applicant/Liquidator made public announcement on 01.04.2019 in Form B of Schedule 2 of the IBBI (liquidation Process) Regulations, 2016, thereby inviting claims from the stakeholders to submit their claims on or before 26.04.2019. The public announcement was made in the following newspapers:

ii) Navrashtra (Marathi)

The Liquidator prepared the list of stakeholders and constituted the Stakeholders Committee (SCC) on 26.05.2019 in accordance with Regulation 31A of the IBBI (liquidation Process) Regulations, 2016. The list of stakeholders was filed before the Adjudicating Authority on 24.06.2019.

The list of stakeholders of the Corporate Debtor consisted of 2(two) secured financial creditors aggregating to Rs.1,34,57,20,968.35/- in value, 55 operational creditors (excluding employees and workmen) aggregating to Rs. 10,62,83,979/- in value and 96 operational creditors being employees aggregating to Rs.83,85,284/- in value. It is submitted that the Corporate Debtor has no workmen.

The Liquidation Estate of the Corporate Debtor consisted of the following assets:

ii) Flat No. 5, 2^nd Floor, Aditya Heights Apartment Condominium, S. no. 164/7, Plot no. 22, CTA no. 2462, Indira Nagar, Chinchwad Village- Chinchwad, Taluka- Haveli, Dist. Pune – 411033.

iii) Plot Nos. 1 to 12, Gut No. 1605, Village Chikhali, Taluka Haveli, Dist. Pune

iv) Plant & Machinery located at above factory place.

It is pertinent to note here that the Average Fair Value and Average Liquidation Value of the Corporate Debtor, as submitted by the appointed Valuers, is Rs.18,29,71,000/- and Rs. 14,21,77,000/-respectively.

On 21.09.2019, the first auction notice was published, however, the said auction was unsuccessful as no buyers came forward to purchase the Corporate Debtor as a going concern. Thereafter, in March 2020, nation-wide lockdown was imposed due to the prevalence of Covid-19 pandemic.

The Liquidator filed an application bearing no. 2131/2020 on 18.11.2020 seeking permission of this Tribunal to sell the identified non-assets of the Corporate Debtor for the purpose of maximum realization of the value of assets. The Ex-promoters filed intervention application no. 2/2021 in the abovesaid application seeking approval of their bid of Rs. 15.30 crores for purchasing the Corporate Debtor as a going concern.

The Tribunal vide order dated 26.02.2021 directed the Liquidator to issue fresh auction notice and also allowed the ex-promoters to participate in the said auction subject to payment of Rs. 75,00,000 in the Corporate Debtor’s Liquidation account.

Subsequently, the 9^th Stakeholders Consultation Committee (SCC) was held on 01.03.2021 wherein Rs. 15,25,00,000 was fixed as the Reserve Price for sale of the Corporate Debtor as going concern.

The Liquidator published the e-auction on 03.03.2021, inviting bids for sale of Corporate Debtor as going concern, in two newspapers namely Financial Express and Navrashtra. It is submitted that prospective bidders submitted Expression of Interests (EoI) along with 5% upfront payment of Rs. 76,50,000. The e-auction was held on 18.03.2021.

Mrs. Janhavi Milind Dixit, the suspended board director of the Corporate Debtor in consortium with Mr. Dinesh Suryakant Waghmare, Proprietor – Hi-Tech Services, had submitted a bid amount of Rs. 15,30,00,000 and emerged as the successful bidder. It is to be noted that the Corporate Debtor is an MSME and in view of the same, the suspended director is not ineligible under section 29A of IBC. Further, the Liquidator has placed on record an affidavit under section 29A of IBC confirming the eligibility of the successful bidders.

The successful bidder paid the entire sale consideration of Rs. 15,30,00,000/- to the Liquidator. Accordingly, the Liquidator issued a Sale Certificate dated 08.04.2021. The amount was distributed under section 53 of IBC amongst the stakeholders. The details of distribution made to the stakeholders is as under: -

Thereafter, the Liquidator made a post-sale public announcement on 01.05.2021 in three newspapers namely, Financial Express (English language), Loksatta (Marathi language) and Navrashtra (Marathi language).

The successful bidder had moved an application no. 741/2021 seeking reliefs and concessions from this Tribunal and the same was allowed vide order dated 21.06.2021. In the said order, the Tribunal directed the secured creditors to handover the title documents of the properties covered under the auction sale process, free from all encumbrances. Accordingly, the two secured financial creditors, viz., Invent Assets Securitisation & Reconstruction Private Limited and Saraswat Cooperative Bank Limited, had issued letter dated 19.07.2021 and 26.07.2021 respectively, acknowledging release of charge on the properties covered under the auction sale process.

In the meantime, the Liquidator moved an application bearing no. 1279/2021 seeking exclusion of time period of 69 days from the Liquidation process period and the same was allowed by this Tribunal vide order dated 20.07.2021.

The Liquidator intimated the Registrar of Companies (RoC) about the initiation of Liquidation Process of the Corporate Debtor and submitted INC-28 with the RoC.

The Liquidator had filed the Preliminary Report and the Asset Memorandum Report on 24.06.2019 under Regulation 12 and Regulation 34(4), respectively, of the Liquidation Regulations.

We note that in compliance with Regulation 36 of the IBBI (Liquidation Process) Regulations, 2016, the Liquidator prepared and issued an Asset Sale Report.

Further, in compliance with Regulation 15 of the IBBI (Liquidation Process) Regulations, 2016, the Liquidator filed Quarterly Progress Reports. The details of the progress reports are as follows:

It is submitted that the Liquidator has also updated the audited Financial Statements of the Corporate Debtor. Thus, the books and accounts and Audited Financial Statements for the Financial Years 2018-19, 2019-20, & 2020-21 were maintained and updated by the Liquidator on behalf of the Corporate Debtor.

The Final Report as per Regulation 45 of the IBBI Liquidation Regulations, 2016 is submitted by the Liquidator along with this Application. Further, the compliance certificate in Form H field under Regulation 45(3) of the said Liquidation Regulation is also annexed to this Application.

The Liquidator submits that a contingency reserve in the form of two Fixed Deposits (FDs) was created in IndusInd Bank on 21.06.2021 & 29.07.2021 respectively for the miscellaneous expenses incurred during the closure of liquidation process of the Corporate Debtor. The details of the 2(two) Fixed Deposits as provided is reproduced hereinbelow:

It is submitted that pursuant to the sale of the Corporate Debtor as a going concern, the aggregate FD amount of Rs. 1,12,57,204/- was distributed in the following manner:

It is also submitted that no PUFE transactions were determined by the Liquidator/stakeholders and hence, no such applications are pending before this Tribunal.

Heard the Counsel for the Liquidator and perused the records.

At this juncture, it is relevant to quote Regulation 45(3) of the IBBI (Liquidation Process) Regulations, 2016:

(Emphasis Provided)

From the perusal of the Application along with the final report and the Compliance Certificate filed in Form-H by the Liquidator, it is seen that the Corporate Debtor has been successfully sold as a going concern to the successful bidder.

In view thereof, we are inclined to allow the present application under Regulation 45(3)(a) of the Liquidation Regulations, 2016.

Accordingly, we hereby order closure of liquidation proceedings of the Corporate Debtor i.e. Envirro Bulkk Handling Systems Private Limited with the following directions:

ii) The Liquidator, Mr. Rajat Mukherjee, is discharged from his duties and responsibilities as the Liquidator of the Corporate Debtor.

iii) The Liquidator and the Registry are directed to forward a copy of this Order to the concerned authorities and the Registrar of Companies having jurisdiction and also to the IBBI, within 7 (seven) days from the date of receipt of this order, for further necessary action as prescribed under Law.

In the result, IA No. 2758 of 2021 is hereby allowed and disposed of and C.P.(IB) – 1319 (MB)/2017 is hereby closed.